It’s official: Volt Bank receives full banking licence, becoming Australia’s first neobank
Image: Volt Bank co-founders Luke Bunbury and Steve Weston
Volt Bank has been granted an Authorised Deposit-Taking Institution (ADI) licence, but isn't rolling out any products just yet.
Digital neobank Volt has today announced it has been granted a full Authorised Deposit-Taking Institution (ADI) licence from the Australian Prudential Regulation Authority (APRA), making it Australia's first official challenger bank. Volt was also the first challenger bank to be granted the new restricted banking licence by APRA back in May, under the government's newly-introduced initiative to increase the competitiveness and innovation in Australia's banking sector.
The restricted licence allows new challenger banks to accept consumer deposits, however there are limits in place in order to protect both the customer and the new bank. Under the restricted banking licence Volt could only accept deposits up to $250,000 from individual customers, so if customers wanted to deposit more than this amount they would need to take their money elsewhere. The restricted licence also meant that the combined value of deposits held by Volt Bank from all consumers was limited to $2 million.
Fast forward eight months and Volt has received its full licence, meaning it can operate completely as a bank without restriction and that it can start to roll out more banking products.
Volt Bank to launch a suite of products in the coming months
Volt plans to launch a range of consumer products including a transaction account, a savings account, a term deposit, a personal loan and a home loan in 2019. In 2020 it plans to introduce some small business banking products to the market.
Volt co-founder and CEO Steve Weston said the products launched by Volt will focus on leveraging technology and data to deliver a new kind of banking experience for customers. "We are building a bank that works tirelessly for our customers and their money. We can do this by being digital only and smartphone led, focusing on removing the 'speed bumps' too often experienced by Australians, like lengthy waiting times and excessive fees. We will roll out cutting-edge technologies, embrace data and analytics and create a highly personalised offer that can be tailored to the specific needs of individuals," he said.
"Our onboarding experience will include features such as rapid account opening enabled by smartphone facial recognition technology and simple transfer of direct debits and other payment details from existing bank accounts to a Volt Bank transaction account."
Volt Bank beats Xinja and 86 400 to become the first official "bank"
Following Volt bank, Xinja became the second neobank to receive a restricted banking licence by APRA in December. While Volt Bank is yet to formally launch any banking products to the market, Xinja has an app and prepaid card which the banking startup says is currently being used by customers in more than 70 countries. No other neobanks have been granted the restricted licence yet. Competing neobank 86 400, funded by payments provider Cuscal, says it has applied for a full banking licence from APRA, which it hopes to receive early this year.
Weston said receiving their full banking licence will give Volt a competitive advantage over it's competitors. "To have received our ADI licence before any other new entrant gives Volt Bank a competitive advantage over challenger banks looking to follow in our footsteps. We also acknowledge that this is a huge responsibility, as we will set the tone for a new era of banking. Receiving our unrestricted ADI licence is a critical milestone and has been no easy feat. Australians can take comfort in the robustness of APRA's licensing process as it thoroughly examined every aspect of our business to ensure that we are prepared for the demands and challenges of running a bank."
While Volt Bank has not announced the launch of any products just yet, it has launched Volt Labs, an app-based online community where potential customers can leave comments and suggestions on its banking products prior to launch. Keen to learn more about these new neobanks? Check out our digital bank comparison here.